Index: cfe/trunk/lib/Parse/ParseDeclCXX.cpp
===================================================================
--- cfe/trunk/lib/Parse/ParseDeclCXX.cpp
+++ cfe/trunk/lib/Parse/ParseDeclCXX.cpp
@@ -2815,16 +2815,10 @@
         break;
       }
 
-      if ((S->getFlags() & Scope::FnScope)) {
-        // If we're in a function or function template declared in the
-        // body of a class, then this is a local class rather than a
-        // nested class.
-        const Scope *Parent = S->getParent();
-        if (Parent->isTemplateParamScope())
-          Parent = Parent->getParent();
-        if (Parent->isClassScope())
-          break;
-      }
+      if ((S->getFlags() & Scope::FnScope))
+        // If we're in a function or function template then this is a local
+        // class rather than a nested class.
+        break;
     }
   }
 
Index: cfe/trunk/test/SemaCXX/cxx1y-generic-lambdas.cpp
===================================================================
--- cfe/trunk/test/SemaCXX/cxx1y-generic-lambdas.cpp
+++ cfe/trunk/test/SemaCXX/cxx1y-generic-lambdas.cpp
@@ -948,3 +948,41 @@
 
 auto x = f(0)();
 }
+
+namespace PR13987 {
+class Enclosing {
+  void Method(char c = []()->char {
+    int d = [](auto x)->int {
+        struct LocalClass {
+          int Method() { return 0; }
+        };
+      return 0;
+    }(0);
+    return d; }()
+  );
+};
+
+class Enclosing2 {
+  void Method(char c = [](auto x)->char {
+    int d = []()->int {
+        struct LocalClass {
+          int Method() { return 0; }
+        };
+      return 0;
+    }();
+    return d; }(0)
+  );
+};
+
+class Enclosing3 {
+  void Method(char c = [](auto x)->char {
+    int d = [](auto y)->int {
+        struct LocalClass {
+          int Method() { return 0; }
+        };
+      return 0;
+    }(0);
+    return d; }(0)
+  );
+};
+}
Index: cfe/trunk/test/SemaCXX/lambda-expressions.cpp
===================================================================
--- cfe/trunk/test/SemaCXX/lambda-expressions.cpp
+++ cfe/trunk/test/SemaCXX/lambda-expressions.cpp
@@ -446,3 +446,33 @@
   template<typename Fn> fun<Fn> wrap(Fn fn);
   auto x = wrap([](){});
 }
+
+namespace PR13987 {
+class Enclosing {
+  void Method(char c = []()->char {
+    int d = []()->int {
+        struct LocalClass {
+          int Method() { return 0; }
+        };
+      return 0;
+    }();
+    return d; }()
+  );
+};
+}
+
+namespace PR23860 {
+template <class> struct A {
+  void f(int x = []() {
+    struct B {
+      void g() {}
+    };
+    return 0;
+  }());
+};
+
+int main() {
+}
+
+A<int> a;
+}